Bradford County to save an additional $800K from its guaranteed energy savings project

BY JAMES LOEWENSTEIN (STAFF WRITER)
Published: August 27, 2010

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Review Photo/JAMES LOEWENSTEIN The Bradford County commissioners announced Thursday that the savings from the county's guaranteed energy savings project will be $800,000 higher than anticipated. From left, Commissioner Doug McLinko, Commissioner John Sullivan and Commissioner Mark Smith.

TOWANDA - Bradford County will save $800,000 more than anticipated through its ongoing $3 million project to make its buildings more energy efficient, county officials announced on Thursday.

The county will issue $3 million in bonds at a low interest rate to pay for the project, and the interest payments on the bonds are $800,000 less than had been anticipated in June, when the cost of the project was announced, said Joan Sanderson, Bradford County fiscal director.

"We're pretty excited about this," said Bradford County Commissioner Mark Smith.

The county is not using taxpayer dollars to pay for the project, but is instead paying for the project though savings in utility bills and through reduced maintenance costs on energy-related equipment, such as boilers and air conditioners, county officials have said.

"The entire cost of the project - $3 million - is funded through savings," Bradford County Commissioner Doug McLinko said. "This ($800,000) is additional savings is on top of all that."

In a June 17 presentation on the $3 million project, which is referred to as a "guaranteed energy savings project," Bradford County officials had said the county would take out a 15-year bank loan at an estimated 4.5 percent interest rate to pay for the project, and they said at the time that the interest that the county would have to pay on the loan would total $1.1 million, according to Sanderson.

To save money, the county commissioners are instead issuing $3 million in bonds to pay for the project, on which the county will have to pay a total of $304,000 in interest, Sanderson said.

The interest rates on the bonds will range from .45 percent to 2.2 percent, depending on when they come due, with an average interest rate of 1.86 percent, Sanderson said.

And the guaranteed energy savings project will now be paid for in seven years instead of 15, as the bonds will be paid off in seven years, Sanderson said.

The project includes numerous energy-saving measures, such as replacing the original single-pane windows in the Bradford County Courthouse, replacing a partially defective 120-ton air conditioning unit at the Bradford County Manor, and replacing two 1989-vintage boilers at the Bradford County jail with more energy-efficient ones, Gates said.

The replacement of the 120-ton air conditioning unit has already been completed, and the rest of the measures will be implemented over the next year, according to representatives from Johnson Controls.

Originally, the county had advertised for proposals from financial institutions for a loan to pay for the project.

Six financial institutions submitted proposals, and their proposals were opened at the July 22 meeting of the county commissioners.

Of the six proposals, TD Bank of Philadelphia offered the lowest interest rate, at 3.3 percent, and the county would have spent $649,000 in interest costs on the TD Bank's loan, Sanderson said.

On Thursday, the Bradford County commissioners voted to reject all six financial institutions' proposals, and to instead finance the $3 million guaranteed energy savings project by issuing bonds through RBC Capital Markets.

The guaranteed energy savings project is taking place at the Bradford County Courthouse, the courthouse annex, the Bradford County Library, the Bradford County Correctional Facility, the Bradford County Emergency Management building and the Bradford County Manor.

James Loewenstein can be reached at (570) 265-1633; or e-mail: jloewenstein@thedailyreview.com.

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